In: Operations Management
In reforestation projects in developing countries are financed to compensate for greenhouse gases. Why is this type of compensation projects often viewed particularly critically?
Compensations are viewed critically because of the following reasons:
· No return on investment: Reforestation plans are considered as expensive projects in most of the developing countries. Cost per ton of carbon storage is relatively expensive, which the developing countries cannot bear. Hence, developed countries compensate for the greenhouse carbon that has no return on investment.
· Costly: Reforestation is an expensive project as planting an average-sized tree costs around $225, and planting a small tree costs around $106, which is critical to be afforded by developing countries. Thus, the compensations for greenhouse gases is higher than other environmental projects.
· Lack of technology: Developing countries do not have such technology that can boost up the speed of reforestation and can decrease the amount of compensation. Thus, it is critical for developed countries to invest in reforestation in countries that do not have sufficient facility to accomplish the goals of making the environment greener.
Thus, compensations are viewed critically.